The fastest growing city in Africa

Is the claim of a fascinating new paper on Juba by Richard Grant and Daniel Thompson (HT: Sean Fox).

Juba, the capital of South Sudan, is the fastest growing city in Africa, exhibiting the most rapid urban expansion and growth ever to take place in the region. Despite its explosive demographic and infrastructural expansion, the urban explosion has received virtually no attention from urban scholars.

since 2005 [Juba] recorded spectacular urban expansion: at upwards of 12.5% per annum, the city’s growth is among the fastest rates of urbanization in human history. [Population] has more than doubled in the past seven years to at least 500,000-600,000 by 2012.

On the urban economy:

The sudden and massive influx of development aid and investment drives local property and consumer markets 

Juba functions within a highly unequal cash economy: while Juba can be among the most expensive cities in Africa (for example US$200 for a basic hotel room and seasonal food price hikes); simultaneously, subsistence wild food harvesting is necessary for many food-insecure urbanites.

On urban livelihoods:

the urban poor concentrate on firewood collection, informal construction (digging pit latrines, stone breaking, and mudding traditional dwellings), charcoal making (exacerbating deforestation), petty trade (tea and food selling), motorcycle taxi (boda-boda) driving, and brewing alcohol.

And on rural "land grabs":

analyses showing approximately 5% of total land is under cultivation 

Between 2007 and 2010, 8% of South Sudan’s total land area was acquired by international private interests (firms from the US, Egypt, UAE, and UK are the largest investors)

Livelihoods 2.0

Duncan Green outlines an emerging new approach at Oxfam;

how do these projects differ from traditional income generation? For decades, NGOs have been showing up in communities and persuading people to raise chickens or rabbits, open tailors, or plant the latest new wonder crop. The record is decidedly mixed. What’s different about this latest round? 

- Involve local government and private sector from the outset - they are the only long term guarantors of ‘sustainability’. 

- Scale - it’s no use just running a pilot and then crossing your fingers. From the outset, you have to think how your intervention needs to be designed to benefit 100,000s of people, rather than 100s 

- It’s about value chains, not just production. Often the real barrier is not growing or making stuff, but finding the credit you need to keep you going between planting and harvest, getting the product to market (the roads here are terrible, gulleyed by rain and gouged by illegal logging trucks), or finding a reliable buyer who pays decent prices. Multiple actors need to be involved - it’s no use just funding a local NGO to hand out seedlings. Systems analysis is essential 

- Advocacy: a systems approach resembles a micro version of Dani Rodrik’s bottlenecks to growth. Resolving one bottleneck (eg supplies of decent seeds), allows the effort to move on until it hits the next one (roads, access to finance, quantity and quality). Some of these can be incorporated into the programme, but many require local level advocacy (eg lobbying the public works department to do something about the roads, or the state bank to start lending to long gestating crops like rubber).

Do Urban Livelihoods Programmes Work?

Apparently not in Sri Lanka.

The authors conduct a randomized experiment among women in urban Sri Lanka to measure the impact of the most commonly used business training course in developing countries, the Start-and-Improve Your Business program. They work with two representative groups of women: a random sample of women operating subsistence enterprises and a random sample of women who are out of the labor force but interested in starting a business. They track the impacts of two treatments -- training only and training plus a cash grant -- over two years with four follow-up surveys and find that the short and medium-term impacts differ. For women already in business, training alone leads to some changes in business practices but has no impact on business profits, sales or capital stock. In contrast, the combination of training and a grant leads to large and significant improvements in business profitability in the first eight months, but this impact dissipates in the second year. For women interested in starting enterprises, business training speeds up entry but leads to no increase in net business ownership by the final survey round.

Suresh de Mel, David  McKenzie, and Christopher Woodruff , "Business training and female enterprise start-up, growth, and dynamics: experimental evidence from Sri Lanka" (HT: @timothyogden)

Targeting the Hard-Core Poor

As briefly flagged in the IPA Annual Report, there are some exciting positive results coming out of the BRAC graduation model. IPA is coordinating evaluations all over the world, and some of the first results are coming out of the Bandhan implementation in India, the evaluation led by Abhijit Banerjee, Esther Duflo, Raghabendra Chattopadhyay, and Jeremy Shapiro (paper here).
As The Economist reports;

Well after the financial help and hand-holding had stopped, the families of those who had been randomly chosen for the Bandhan programme were eating 15% more, earning 20% more each month and skipping fewer meals than people in a comparison group. They were also saving a lot. The effects were so large and persistent that they could not be attributed to the direct effects of the grants.

What worries me is how scalable this programme is. That word "hand-holding" worries me. How many developing country governments have the resources and management capacity to arrange for a detailed skilled-labour-intensive personalised package of intensive support for every poor person? How many developed country governments have the capacity for that?

It worries me especially when there are so many easily scalable cost effective programmes out there that are not being funded. Why not focus first on the simple things that we know to work, like universal child grants or universal school meals, that can easily have a big impact on millions?

DFID Livelihoods Program in South Sudan

DFID is planning to spend up to £100 million on food security and livelihoods in South Sudan over the next 5 years, the largest of all its programs. Is that a lot or a little?

DFID's expected results in this area are to support 1 million people to achieve food security.

Not knowing the details of the program, I am going to imagine for a second that DFID has a zero-overhead cash transfer or food voucher planned. 

£100 million over 5 years, divided between £1 million people, is 5.4 pence a day each. 

"Hello there Mr. Deng, here's 5 pence, buy yourself a sandwich yeah? Go nuts with it, I'll give you another 5p tomorrow! Sorted yeah?"

So - to get to an even slightly more realistic sufficient basic daily income, all we need is for economies of scale, support to production, and that vocational training, to have a 1000% return. Good job that we have all that evidence about the massive massive returns to livelihoods programs. Wait...

The economics of livelihoods

I'm not really sure what "livelihoods" means, except that I know that NGOs talk about it a lot, and that it seems to have something to do with helping poor people to generate more income. In fact NGOs seem to spend a lot of time and money trying to help poor people to improve their livelihoods, or generate more income. Now, how people generate their income sounds a lot like the kind of problem that economics was designed to deal with. In fact, a naive observer might have guessed that the whole point of micro development economics was to apply theory and evidence to the question of how poor people generate their income, and what interventions can do to improve matters. Which might have led you to expect a voluminous literature on the economics of livelihoods.

A google search for "the economics of livelihoods" gets you 51 results. "The economics of livelihoods approaches" get you zero. Now, I think this is probably just an issue of terminology. Is this an unexploited niche for economists to influence policy just by speaking NGO language?